Thursday update

SHORT TERM: consolidation day, DOW -24

Overnight the Asian markets lost 0.4%. Europe opened higher but lost 0.4% as well. US index futures were lower overnight. At 8:30 Q3 GDP was reported lower: +1.5% v +3.9%, (the market had little reaction), and weekly Jobless claims were higher: 260K v 259K. The market gapped down at the open to SPX 2085, it had closed at 2090 yesterday. In the opening minutes it dipped to SPX 2084 and then tried to rally. At 10am Pending home sales were reported lower: -2.3% v -1.4%. Just past 10am the SPX made it back to 2090 and then started to pullback again. At 11am the SPX hit a slightly lower low at 2083, and then rallied to 2093 just before a 2089 close.

For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.30%. Bonds lost 20 ticks, Crude slipped 15 cents, Gold dropped $11, and the USD was lower too. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Personal income/spending and PCE priced at 8:30, the Chicago PMI at 9:45, and Consumer sentiment at 10am.

The market gapped down at the open today, rallied back to close the gap at SPX 2090, then went into a narrow trading range. Heading into the close the market hit SPX 2093, a new uptrend high, then backed off. Nothing has changed much for the wave count: Minor wave 5, of Intermediate wave iii, of Major wave 3 is subdividing. Thus far we have from the SPX 2059 Minor 4 low: 2085-2063-2093. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2100 and the 2131 pivot. Short term momentum stayed above neutral after yesterday’s negative divergence. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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148 Responses to Thursday update

  1. Dex T says:

    The news with Philidor turned out to be accurate even though first denied any wrongdoing. Apparently there is more bad news to be delivered on Monday.

    Valeant says Philidor pharmacy shutting down as it cuts ties

    “Influential short-seller Citron Research was one of the first critics to call the company out on Philidor in an Oct. 20 report, saying Valeant was using the pharmacy set-up to inflate revenue. Valeant has denied any wrongdoing.”

    “Citron said: “$VRX has a better chance of going to 0 than $HLF EVER will. Citron to update full story on Monday. Dirtier than anyone has reported!!”

    “Later Thursday, three top U.S. drug benefit managers, who administer prescription medicine benefits for health plans, said they would no longer work with the pharmacy. Express Scripts , CVS Health and OptumRx, part of UnitedHealth Group Inc, said they made the decision after conducting audits of the pharmacy.”

  2. Tony Jordan says:

    For the afternoon decline let’s try Minute 4 of Minor 5 of Int. iii.

  3. uncle10 says:

    Looks like our friend CN’s Big Down set up ( if we don’t spike up at the end of day). The last one did not trigger and upon further study really wasn’t one any way. Today’s looks pretty classic to me.Gl and Good weekend all.
    btw, our trusty cnn fg index up almost to extreme greed….. 😉

  4. gtoptions says:

    Anyone think SPX was in a LD from yesterdays low?

  5. phil1247 says:

    now that we dropped 10 spx points from the high

    bot back 1/2 of 25% long sold at 618 retrace

    LONG 12.5%………picking up pennies……hahahah

  6. aahmichael says:

    This may be premature, but there is a huge possibility that the SPX has now completed 5 waves up from 1991. Wave 5 was a terminal from 2059.

  7. purplember says:

    Tony, after Cycle 1 finishes then C2 down and C3 is strong bull market. However, when i look at debt levels for USA 19 trillion and growing fast. Add in Baby boomers hitting retirement age (less tax revenue & ppl investing in stocks). Then add Medicare is a Titantic of debt.

    People don’t realize: 1 trillion of debt per year is $114,000,000 (yes 114 million) of debt per HOUR x every hour for year (8,760 hrs).

    $19 trillion by 131 million households = $145,000 of debt per household

    With severe headwinds, will we have the growth etc…to usher in a prolonged bull market ?

    others thoughts ??

    • tony caldaro says:

      Gov’t debt is never repaid.
      In this monetary system, the more debt you create the more money (since money is debt) is floating around.
      The only time a country runs into problems is when the debt becomes difficult to service.
      With the FED’s new QE gimmick they could effectively buy all the US debt, and then servicing that debt would never become a problem, as the FED gives the Treasury nearly all the interest it earns on the debt. It is quite ingenious.
      The next time debt will become a problem for the US is when the economy really starts to grow again, and all that excess liquidity turns into purchasing power. Soon after, maybe several years, inflation will perk up and if the FED had not done anything to lower their balance sheet commodities will zoom. But this is at least a decade from now.

      • purplember says:

        thank you for the response. however china / japan buys a great deal of this debt. i hear what your saying about FED & debt but it seems debt levels over GDP should be concerning (ask greece & some EU countries). plus if interest rates spike, interest payments to debt holders (other than fed) could get expensive..

  8. phil1247 says:

    short from highs trades PERFECTLY…

    if i t completes 2074 es is target

    picking up pennies in front of that steam roller ???

  9. Dex T says:

    Some great information in the article below. I posted some interesting excerpts.

    Oil Will Struggle to Break Past $60 a Barrel in 2016

    “Some of the world’s largest energy companies and investment banks are becoming more pessimistic about the ability of crude oil pricing to reach even $60 a barrel next year, reporting steep losses as they take hits on projects that no longer make financial sense.”

    “Petro China Co., the biggest oil-and-gas producer by volume in China, said its third-quarter profit fell by more than 80%. ”

    “Shell’s about-face is among the industry’s starkest. The U.K.-Dutch giant had appeared optimistic about the future direction of oil prices, moving aggressively earlier this year to buy BG Group PLC for $70 billion.

    Now, Shell is looking at about $55 a barrel as the break-even price for new projects and took billions of dollars in impairment charges in the third quarter after lowering its long-term oil and gas price outlook.”

    “Iran, which holds 13% of the world’s oil reserves, is expected to ramp up oil exports when sanctions against the country are lifted following July’s nuclear agreement with major Western powers. While gradual, Iran’s return could add up to 500,000 barrels a day to the global oil market by the middle of 2016, analysts say.”

  10. does anyone have a target for Major 3 Assumes int 3 is 2110-2120 then Int 4 1980-1990 where does int 5 go? 2150ish?

  11. bolderbob says:

    Tony, one of the most difficult things to do is get the degree of trend correct. What do you use to decide the degree? For example, in P5 why did we start off with Majors rather than Minors or some other degree of trend? Thanks!!

  12. mailming says:

    Hi, Tony

    During the off-hours, SPX briefly touched 2101 and dropped back to 2090, Does it count as start of wave IV (end of wave III)


  13. phil1247 says:

    caught in no mans land between support and resistance.

    cautious below 2088 ES

  14. gtoptions says:

    Thanks Tony
    SPY ~ Rising Wedge, bullish breakout or will it fail?
    GL & Good Weekend All

  15. mjtplayer says:

    Since Wednesday’s close, a dead flat market trading in just a 10pt range on the SPX. Boring…

  16. fionamargaret says:

    …is it even possible we are starting 4 down…..??

  17. phil1247 says:

    previous -23% target was hit over nite …triple lines

    sold 25% SSO from 2004 premarket this am

    extension long from 2074 is broken

    will support hold at 2074 area ? {50 and 618 levels below } …who knows ..but this looks to me like trying to pick up pennies in front of a steam roller…

    still holding 25% long sso from 2004 spx hoping for a miracle

  18. Tony, how much of a pullback should we expect after this current wave tops around 2110-2120 next week?


  20. James Green says:

    FB Looks like a very good shorting opportunity at these levels…All the best to your trades today.

  21. ABchart says:

    Strong Chicago PMI at 56.2 vs expectations at 49.4

  22. ariez5 says:

    Bears may want to look at EWJ.

  23. Just fyi – NQ futures made a new all-time-high in the overnight, pretty much eliminating any doublt about Primary 5, as chart below shows.

    NQZ15 - Primary Analysis - Oct-30 0839 AM (1 day)

  24. sibyn says:

    SPX CH handle done2090,5 CH Goal 2117,989
    CH Fails at 2083,99
    DAX CH handle done10775 CH Goal 10843,068
    CH Fails at 10758,88
    Regards #NybisSibyn

  25. nsteve24 says:

    BOJ on Hold, no increase in monetary base at annual pace of 80 trim yen
    8-1 vote, Kiuchi the dissenter

  26. uncle10 says:

    Just read an article that the Central Bank of Japan owns 52% of the entire Japan stock market. And they plan on buying much more. If they buy all the market I guess they can set the price to what ever they want??

  27. cwallace90 says:

    Hello all,

    Below please find a blog post I did with a detailed Elliott Wave and Macro Analysis:

  28. Sandra Dons says:

    Sorry Mr Caldaro the target of this last run up for you still remains at 2200 of SPX?

    Thank You so much

  29. stephenk1980 says:

    Resistance levels have still held, but it looks like just a matter of time until they are broken the way that price is behaving.

  30. MR C just wondered what minor 5 subdividing means in additional S&P points? And from what level…2120? I guess I m assuming your initial goal of 2120 should be surpassed now? Thanks.

  31. Well done Tony.. You are forgiven in the future if you miss by a point here or there. Overall, I am quite impressed with your tea reads. I didn’t think it could be done. Now I am studying Elliot like there is no tomorrow. Boy do I have a long way to go.

    • tony caldaro says:

      welcome Richard,
      EW is always at work.
      It’s the one reading the waves that gets lost.

    • Richard get a set of the basic rules and learn the look of a wave. Few are perfect but none break the rules. Many people post EW charts that break all types of rules and the next day the whole chart changes to reflect what really happened. Tony in the 6 years I have followed tweeks but has never had to do a major overhaul.

  32. torehund says:

    Calmness of fine tremor….Poseidon lurking somewhere, but when will he strike ?
    Or maybe Merkel is the new queen of Halloween.
    Well, Greece has been silent for some time too…..

  33. Arthur Knopf says:

    Weekend before last, I posted the results of some sentiment analysis that I had done that was similar to the pattern of the Nov-Dec 2014 top before a 100 pt drop in the SPX. Today while checking some of my “canned” graphs, I also found a strong similarity in the McClelland Oscillator as well.

    Looking at the period from Aug-Oct of 2014 and 2015, in both cases the initial decline took the MO below -80 followed by a weak rally, a higher low, finally a thrust over 80. After that the MO declined as stocks advanced, we are currently in the same position as late Nov 2014.

  34. Any comments on GDX and Gold. I bought Some GDX today as FED raising rates is not real and I was hoping to a good return. Seems like all the Miners in GDX are doing well with cost cutting and reducing production costs, but GDX got hammered today..

    Bought at 15.4… May set stop loss at 14.6.. Am I looking at this right?

    • mjtplayer says:

      I’m long DUST and haven’t sold yet, so that’s where I stand.

      Daily bearish reversal “engulfing” candle on both GLD & GDX yesterday, that’s bearish. Follow through today, that’s bearish. Both also look to print weekly bearish reversal “engulfing” candle, very bearish.

      If GDX drops below $14.71 then 3-waves up from the Sept low, that’s bearish.

      Open gaps at $13,41 & $14.49 – possible downside targets.

      Heavy volume yesterday and today on the selloff.

      Lots of bearish data, nothing bullish.

  35. gasman88 says:

    So many headwinds, economy, earnings, it’s reall difficult to understand where the strength is coming from,

  36. llerias7 says:

    Problem is that if Int. III ends at 2100 it travels less points than Int. I did!?

  37. mike7x says:

    Thanks Tony. Boring. Not you, today’s market action. Kinda unusual for a post-FOMC trading day.

  38. fishonhook says:

    Tony will you please put that iii back so we can get this danged P5 over and done with!

    • jeffbalin says:

      You must be crazy. I had such a hard time with primary 4, I have no desire to see any downtrend for a long time. Extend away!

  39. mailming says:

    Do you mean “with resistance at SPX 2100 and the 2119 pivot”,


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